Solana Update Directs All Priority Fees to Validators
A new update on Solana has been implemented, redirecting all optional priority fees from users to the validators of the blockchain.
Key points include:
- Solana's median priority fee decreased by 40% following the update.
- Liquid staking tokens (LSTs) now offer higher yields as they allow validators to pass along priority fee rewards.
- Previously, half of the priority fees were burned, leading to a decision to allocate 100% to validators.
- Current proposals aim to establish in-protocol priority fee sharing, but activation will take time.
- Sanctum plans to create an LST for every validator, increasing the total to over 1,000.
- Yields for many LSTs have increased, with Jupiter's yield rising to 11.96%.
- Concerns exist regarding potential tax implications and the trustworthiness of validators in passing yields.
- Jito introduced TipRouter for transparent priority fee distribution.